Parliament reviews optional reverse charge anti-fraud tool
Balancing proven success against VAT distortions and the rise of real-time digital reporting controls
The European Parliamentary Research Service has reopened the debate on the EU’s optional reverse charge mechanisms as their current authorisation under Articles 199a and 199b of the EU VAT Directive 2006/112/EC approaches expiry on 31 December 2026.
These frauds exploit emotional vulnerability and trust rather than technical weaknesses.
- Romance Scams: Scammers build long-term online relationships with victims, eventually fabricating a “crisis” (medical emergency, legal trouble, or travel costs) that requires the victim to send money.
- Pig Butchering: A hybrid scam where the criminal builds a romantic or platonic relationship to eventually “tutor” the victim in a fraudulent cryptocurrency investment.